Georgieva: “Difficult to assess what would be needed to ensure Ukrainian debt sustainability”
The International Monetary Fund reports that the Executive Committee has approved $ 1.3 billion in emergency funding for Ukraine. The IMF recalls that “more than seven months after the start of the Russian invasion of Ukraine, the humanitarian and economic budget remains heavy, resulting in large and urgent funding needs” but it also underlines how the Kiev authorities deserve a “considerable credit for maintaining a high degree of macro-financial stability in particularly difficult circumstances”.
In a message on Twitter, Ukrainian President Zelensky stresses that “this money will go to Ukraine today. Thanks for the support of Kristalina Georgieva and the Executive Committee of the IMF”.
“The scale and intensity of Russia’s war against Ukraine, which began more than seven months ago, has caused enormous human suffering and economic pain” recalls the Council which “predicts that real GDP will contract by 35% in 2022 compared to to 2021 while the financing needs will remain very high “. This disbursement – it is underlined – “will help to meet the urgent needs of the balance of payments, also due to a severe shortage of cereals exports, while at the same time playing a catalytic role for a further financial support from Ukrainian creditors and donors“.
“The Executive Committee – concludes the statement – reiterated its strong support for the Ukrainian people”.
“The Russian invasion of Ukraine, which began more than seven months ago, has caused massive loss of life, massive population displacements and significant destruction of infrastructure and housing. The impact on economic activity has been enormous: GDP real estate contracted severely, inflation rose sharply, trade was severely disrupted and the budget deficit increased to unprecedented levels“, remembers Kristalina Georgieva, director general of the International Monetary Fund.
“Ukraine – he adds – must face risks and uncertainties related to the dangerous security situation, the ability to implement policies and external developments”. In this context, for Georgieva “the very high uncertainty makes it difficult, at the moment, to assess with sufficient precision what would be necessary to ensure the sustainability of the Ukrainian debt, but the probability balance suggests that there are greater risk of debt becoming unsustainable“.
“In conjunction with Ukraine’s continued commitment to economic, fiscal and governance reforms, as well as the strong commitment of all other stakeholders, including international financial institutions and the private sector, most bilateral creditors and donors Ukrainian officials, through relevant executive directors at the Fund – have signaled that they intend to continue to financially support Ukraine to help achieve a balanced growth path and medium-term external profitability, “Georgieva concludes.